Which of the Following Is a Current Liability

question 42

Multiple Choice

Which of the following is a current liability?

• A)Prepaid insurance
• B)Retained earnings
• C)Unearned rent revenue
• D)Bonds payable
• E)Common stock

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Definitions:

Treasury Stock

Shares that were previously issued and outstanding but have been repurchased by the issuing company and held in its own treasury.

Debit Balance

The remaining amount in a financial account that appears on the left side of the account ledger, indicating assets or expenses.

Dividends In Arrears

Outstanding dividends on cumulative preferred stock that have not been paid by the designated payment date.

Cumulative Preferred Stock

A type of preferred stock that entitles shareholders to receive dividends in arrears before any dividends can be distributed to common stockholders.